ExxonMobil is discontinuing operations and taking steps to exit the Sakhalin-1 oil and natural gas venture, which it operates with Russia’s state-owned Rosneft. In addition, no future investments in new Russian developments are planned in response to the unprovoked attack on Ukraine.

The integrated major operates the Sakhalin-1 project with a 30% stake on behalf of an international consortium of Japanese, Indian and Russian companies.

“In response to recent events, we are beginning the process to discontinue operations and developing steps to exit the Sakhalin-1 venture,” executives said. “Given the current situation, ExxonMobil will not invest in new developments in Russia.”

Because affiliate Exxon Neftegas Ltd. operates Sakhalin-1 with a 30% stake, ExxonMobil has “an obligation to ensure the safety of people, protection of the environment and integrity of operations,” executives said. “Our role as operator goes beyond an equity investment.

“The process to discontinue operations will need to be carefully managed and closely coordinated with the co-venturers in order to ensure it is executed safely.”

Sakhalin-1’s other partners are represented by Rosneft affiliates RN-Astra (8.5%) and Sakhalinmorneftegaz-Shelf (11.5%). Japan’s Sodeco Consortium has a 30% interest, while India’s Oil and Natural Gas Corp. affiliate ONGC Videsh Ltd. holds a 20% stake.

According to ExxonMobil, Sakhalin-1 is one of the “largest, single international direct investments in Russia. Although it was discovered several decades ago, the Sakhalin-1 fields were not developed until “technologies became available as a result of successful partnership between Russian and international companies.”

​​Sakhalin-1’s Arkutun Dagi, Chayvo, Odoptu fields are off the northeastern coast of Sakhalin Island in the Russian Far East. They are being developed using a phased approach.

Irving, TX-based ExxonMobil said it “supports the people of Ukraine as they seek to defend their freedom and determine their own future as a nation. We deplore Russia’s military action that violates the territorial integrity of Ukraine and endangers its people.

“We are deeply saddened by the loss of innocent lives and support the strong international response. We are fully complying with all sanctions.”

ExxonMobil has partnered with Rosneft and other international co-venturers to produce oil and natural gas offshore Sakhalin Island for close to 20 years. 

The announcement comes after BP plc on Sunday became the first international oil company to announce it would dump its Rosneft stake and stop new spending in Russia. Shell plc and Equinor ASA followed suit on Monday. TotalEnergies SE joined the energy major coalition on Tuesday to disavow Russia’s incursion into Ukraine.

Analysts with Tudor, Pickering & Holt Inc. said Wednesday that in recent years, Russian volumes have made up “only 4% of ExxonMobil’s overall upstream portfolio.”